You may be ready to buy that dream house of yours financially, but are you sure you have done all the research that is needed before making that decision? Investing in property, especially residential property is a big decision since you will be living in that apartment or house that you brought for the foreseeable future.
Here are a few common mistakes to avoid.
Affordability: Knowing what to invest doesn’t matter if you don’t know how much to invest. The biggest factor that should be taken into account is affordability. With so many banks and financial institutions offering attractive loan schemes and rates of interests, one can easily get carried away. But availing a substantial loan to buy that dream house of yours is just the first step. You should be able to figure out your spending limit and most importantly figure out how much you can comfortably afford to spend on housing per month, from your income. There are very easy to use mortgage calculators online which will help you determine the exact cost of your monthly investments.
Consider variations of expenses: Buying a house and maintaining the same house are two different costs altogether. You might be able to splurge a little more and buy that dream house of yours, but taking care of the fixed and variable expenses that you will incur will take a toll on your finances. One of the major components being the amount of tax which is to be paid on the property, other overheads fixed and variable amongst many other expenses. Home insurance is a key expense which will again add to the already long list of costs being incurred.
Adjusting v/s compromise: There is a glaring difference between the term adjustment and compromise. Adjustment will involve minor things, but compromising will make you question your investment at the end of the day. For example, if you are planning to have a big family, it just doesn’t make sense to buy a small house because right now it is cheap. A smaller apartment or house will only add to your troubles, instead an initial investment which might be tight on the budget can be made if this is the case. This is after factoring in all the other costs, plus the increased expenses because of the addition of one more family member.
You have to give this a fair thought to consider other factors like whether to hire and agent or not, is there a need for inspection though it is advisable that a thorough inspection be done before even making an offer. Have a broad vision of the type of house you want and plan accordingly, don’t be too picky for the market is limited and the demand is high. The more you wait, the higher are the chances of prices being hiked.